Strait of Hormuz: the world’s most important oil artery
Iran has said it would block the Strait of Hormuz if it was barred from using the strategic waterway through which about a fifth of oil that is consumed globally passes.
The threat from an Islamic Revolutionary Guards Corps (IRGC) commander followed a U.S. announcement on Monday that it would end exemptions granted last year to eight buyers of Iranian oil and demanding they stop purchases by May 1 or face sanctions.
Oil prices have surged to six-month highs.
The Strait of Hormuz, a vital shipping route linking Middle East oil producers to markets in Asia, Europe, North America and beyond, has been at the heart of regional tensions for decades.
Iran has made threats to block the waterway in the past, without acting on them.
Below is some background about the Strait:
WHAT IS THE STRAIT OF HORMUZ?
* The waterway separates Iran and Oman, linking the Gulf tothe Gulf of Oman and Arabian Sea. * The Strait is 21 miles (33 km) wide at its narrowestpoint, but the shipping lane is just two miles (three km) widein either direction.
WHY DOES IT MATTER?
* The U.S. Energy Information Administration estimated that18.5 million barrels per day (bpd) of seaborne oil passedthrough the waterway in 2016. That was about 30 percent of crudeand other oil liquids traded by sea in 2016. * About 17.2 million bpd of crude and condensates wereestimated to have been shipped through the Strait in 2017 andabout 17.4 million bpd in the first half of 2018, according tooil analytics firm Vortexa. * With global oil consumption standing at about 100 millionbpd, that means almost a fifth passes through the Strait. * Most crude exported from Saudi Arabia, Iran, the UnitedArab Emirates, Kuwait and Iraq — all members of theOrganization of the Petroleum Exporting Countries — is shippedthrough the waterway. * It is also the route used for nearly all the liquefiednatural gas (LNG) produced by the world’s biggest LNG exporter, Qatar.
During the 1980-1988 Iran-Iraq war, the two sides soughtto disrupt each other’s oil exports in what was known as theTanker War. * The U.S. Fifth Fleet, based in Bahrain, is tasked withprotecting the commercial ships in the area. * “While the presence of the U.S. Fifth Fleet should ensurethat the critical waterway remains open, provocative Iranianmilitary manoeuvres are likely in the immediate offing as is anuclear restart,” analysts at bank RBC said on April 22. * Iran agreed to rein in its nuclear programme in return foran easing of sanctions under a 2015 deal with the United Statesand five other global powers. Washington pulled out of the pactin 2018. Western powers fear Iran wants to make nuclear weapons.Tehran denies this. * “All of these geopolitical stories could present a cruelsummer scenario for President (Donald) Trump as he seeks to keepoil prices in check,” the RBC analysts said.
ARE THERE ALTERNATIVE ROUTES FOR GULF OIL?
* The UAE and Saudi Arabia have sought to find other routesto bypass the Strait, including building more oil pipelines. * The following EIA table shows existing pipelines andproposed
projects: For a graphic on Pipelines Bypassing Strait of Hormuz, click
HAVE THERE BEEN INCIDENTS IN THE STRAIT BEFORE?
* In July 1988, the U.S. warship Vincennes shot down anIranian airliner, killing all 290 aboard, in what Washingtonsaid was an accident after crew mistook the plane for a fighter.Tehran said it was a deliberate attack. The United States saidthe Vincennes was in the area to protect neutral vessels againstIranian navy attacks. * In early 2008, the United States said Iranian boatsthreatened its warships after they approached three U.S. navalships in the Strait. * In June 2008, the then Revolutionary Guardscommander-in-chief, Mohammad Ali Jafari, said Iran would imposecontrols on shipping in the Strait if it was attacked. * In July 2010, Japanese oil tanker M Star was attacked inthe Strait. A militant group called Abdullah Azzam Brigades,which is linked to al Qaeda, claimed responsibility. * In January 2012, Iran threatened to block the Strait inretaliation for U.S. and European sanctions that targeted itsoil revenues in an attempt to stop Tehran’s nuclear programme. * In May 2015, Iranian ships fired shots at aSingapore-flagged tanker which it said damaged an Iranian oilplatform, causing the vessel to flee. It also seized a containership in the Strait. * In July 2018, President Hassan Rouhani hinted Iran coulddisrupt oil flows through the Strait in response to U.S. callsto reduce Iran’s oil exports to zero. A Revolutionary Guardscommander also said Iran would block all exports through theStrait if Iranian exports were stopped.
Source: Reuters (Reporting by Ahmad Ghaddar; Editing by Edmund Blair)